We've got an update on the CDK Global situation. Listen to this morning’s show to hear more from Paul and Kyle, or read on.
CDK recently got their dealership management system back online after those cyberattacks on June 19th. They have offered affected dealerships a one-month rebate on their subscription fees as compensation.
While dealers appreciated this, many are saying it’s not enough. They've had to deal with extra costs from overtime, using slower manual processes, and hiring temporary third-party software solutions.
Dealers like Judy Farcus Serra from Headquarter Automotive think three months of compensation would be more fair.
Damon Lester from Nissan of Bowie mentioned their costs, especially for manpower, which were way higher than the rebate CDK offered.
Our friend Wayne Rampone Jr. said on LinkedIn, “I think it will take more than that if they want a chance at their customers re-signing with them when their contracts are up.”
David C Rogers suggested that this may be CDK’s attempt to anchor negotiations in their favor.
What do you think? Leave a comment and we will use it in a piece of community content. 🤔
On top of that, CDK is now facing an antitrust class action lawsuit. A federal judge in Chicago has allowed software vendors to band together to sue CDK for allegedly restricting access to data and causing overcharges. AutoLoop and other vendors are accusing CDK of suppressing competition and are seeking $395M in damages. This class action includes 244 software vendors, and it’s set to go to trial in Wisconsin, though no date has been set yet.
Also, it’s worth mentioning that CDK reportedly paid a paid a $25M ransom in Bitcoin to end the cyberattack. The attack lasted two weeks and forced dealers to go back to manual processes, likely affecting vehicle sales for June.
So, CDK has a lot on its plate right now, both in trying to compensate their dealership customers properly and dealing with these legal battles. Let’s see how it all unfolds!